Frequently asked questions

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Why FirstStep?

Why FirstStep?

FirstStep helps you invest as you spend. It analyses your discretionary spending and automatically saves small amounts into a professional investment account.Through smart technology, we help spenders become better wealth builders.

How does it work?

The way it works is pretty simple:1. Download the app and sign up to FirstStep; during signup we ask you to set a saving goal and connect your debit or credit card; 2. FirstStep then analyses your spending and automatically invest small amounts of money from your bank account to your FirstStep Account; 3. Your FirstStep Account then invests in a diversified portfolio of ETFs offering choice across several investment themes; 4. That's it! You save and earn money without realizing it. No minimum amounts required, track your savings progress and you can withdraw your money anytime.

How has FirstStep performed?

Updated 10th July 2018. The average FirstStep customer has made 12.86% per annum over the last year and 15.44% since inception.Returns exclude Usual Expenses, Spread and Account Fee of 0.275%. Excludes minimum Account Fee. Past performance should not be taken as an indicator of future performance.

Why are we different?

FirstStep dedicates every second of each day to help you invest more and save better. We offer a personalised experience to help you automatically save for your goals with saving rules set around your individual spending habits. Additionally, we personalise the investment experience by letting you choose investment themes that are well-known, straightforward and aligned to your life cause.

Opening a FirstStep account

How do I open an account?

Download the App (search for “FirstStep Investments” in the App Store for iOS, or Play Store for Android). During signup we ask you to complete an application form, set a saving goal and connect your debit or credit card. FirstStep then uses this information for Account Verification.

Why do you need to verify my identity?

This is a requirement for financial apps. FirstStep is required by the Anti-Money Laundering Act (AML/CTF Act 2006) to collect and verify customer information. To verify your identity we ask for your name, date of birth and address. We cross check this information against government databases. If there are any inaccuracies we will ask for more information including a drivers license, passport, medicare card or proof of age card. All your personal information is protected and we employ strict procedures that comply with the Privacy Act 1998.

How long will it take to invest my Initial Deposit?

It usually takes between 3-5 days to process your first investment. In some instances, FirstStep uses direct debit to transfer money into your FirstStep Account, which can take 2 days to process. Once FirstStep receives your Initial Deposit, it reconciles the amount to your account and then purchase ETFs when the market is open.

What is the minimum investment?

You can open a FirstStep Account with just $1 as your first investment.

What if I change my mind?

You have the right to cancel your investment by notifying us through in-app chat or email. This is called cooling off. By law you have 14 days starting from the earlier of when FirstStep makes your first investment or the end of the 5th day after the day on which we made that investment.

How old do I have to be to open an account?

You must be at least 18 years old to open a FirstStep account

Is FirstStep available to people outside of Australia?

Currently FirstStep is available only to Australian residents.

What's the minimum amount of money I need to get started?

$1

What's the maximum amount I can invest at one time?

Yes, the current daily deposit limit is $10,000.

What is a Product Disclosure Statement (PDS)?

It tells you about the FirstStep Fund (FirstStep) and is prepared by OneVue RE Services Limited, the responsible entity (or trustee) of FirstStep. The law regulates documents like this, so our trustee must tell you certain things, in a certain order, and we can't take more than 8 pages. Read the document and read it carefully before you start to invest

Investing with FirstStep

How do I set a Saving Goal?

During signup FirstStep asks you to set a goal name, the amount you’d like to save. You can update your Savings Goal from the ‘Home’ screen after your FirstStep Account is verified.

How are savings transferred to to my FirstStep Account?

Twice a week, FirstStep transfers your total deposit from your bank account to your FirstStep Account. Your total deposit is made up of savings from Rules and Top Ups.

What are Rules?

Rules are designed to help you effortlessly invest. They are summarised into two types 1. Transactions 2. Recurring Deposits. Transactions are saving suggestions unique to your discretionary spending habits and income. For example, “FirstStep, invest $10 every time I order Uber Eats”. Another example is Roundups. Roundups track the spare change from your transactions and make it available for you to invest. Recurring Deposits are fixed amounts you invest on a weekly, fortnightly or monthly basis.

How do Transaction Rules work?

FirstStep analyses your discretionary spending and income and suggests ways to automatically save small amounts. For example, FirstStep may suggest saving $5 on every a $25 purchase of delivery food, or $10 on a $100 retail purchase. If you follow a 50-30-20 rule (50% income put towards necessities, 30% towards discretionary spend and 20% towards savings goals) then you can opt into depositing between 5-20% of your salary, 5 days after you’re paid. Individuals Rules are unique to you so you don’t need to change your lifestyle.

How do Roundups work?

A Roundup is the virtual spare change captured from rounding up a transaction to the nearest dollar. After linking your credit or debit card to your FirstStep Account we check to see if there are any new purchases that are less than a whole dollar. Say you bought a coffee for $4.50. FirstStep rounds up to the next whole dollar – in this case to $5.00 – and invests the difference - $0.50 - moving the cash to your FirstStep Account. Your Roundups are viewable in the app and you can change your Roundup settings at anytime.

How do Top ups work?

You can invest more by making one off deposits. Simply open the app and go to the + button. Enter the amount and click "Top up". You can also Top Up manually through an EFT payment (Electronic Fund Transfer). We call this a Pay-in. Simply open the app and go to the + button to check the Pay-in details including, and most importantly, your unique reference number.

What happens if I deposit $50 in FirstStep?

Each FirstStep portfolio is made up three ETFs (or Exchange Traded Funds) managed by Vanguard. The three ETFs are Australian Shares, International Shares and Australian Fixed Income. An ETF is a collection of shares and bonds and the mix of ETFs in each FirstStep portfolio is built to optimise returns for a given level of risk. FirstStep offers three risk profiles; Defensive (low risk), Balanced (medium risk) and Growth (high risk). Let’s say you invest $50 in a Balanced portfolio, $15 is invested towards Australian Shares, $15 to International Shares and $20 to Australian Fixed Income. FirstStep also offers choice in Themes that are well-known, straightforward and aligned to your life cause. You can decide to invest in as many themes as you want, FirstStep will always keep your portfolio optimised to your level of risk. Let’s say you choose to invest $50 in a Balanced portfolio with Tech and Ethical themes, $15 is invested towards Australian Shares, $5 to International Shares, $20 to Australian Fixed Income, $5 to Tech and $5 to Ethical. Because ETF’s are a collection of shares and bonds, the $5 invested in Tech is diversified even more and split up to buy shares of individual shares. Of that $5, 54 cents is invested in Apple, 33 cents in amazon, and so on... FirstStep is able to invest 54 cents in Apple through Fractional Investing which lets you invest small amounts towards individual shares. You will always have a diversified portfolio while investing as little as $1 at a time.

Can I withdraw my money whenever I want?

Yes, it’s your money! It usually takes 7 business days to transfer money back into your bank account.

What is an Investment Option?

FirstStep gives you access to a range of 'Investment Options'. Each represents a different mix of investments and each feels and is different. FirstStep's range of Investment Options allows you to choose what sort of investment portfolio you will have. They are explained in the Investment Options booklet which is part of this PDS.

How does FirstStep maintain my risk profile over time?

Over time, Exchange Traded Funds (ETFs) in your portfolio increase and decrease in value, resulting in a change to your risk profile. To return your portfolio to your desired risk profile, FirstStep will automatically rebalance portfolios. On a quarterly basis we will actively rebalance your profile to your desired allocation, if the allocation varies by greater than 5%.

Can I select my portfolio?

Yes, FirstStep gives you access to a range of 'Investment Options'. Each represents a different mix of investments and each feels and is different. The Investment Options may change from time to time. FirstStep's rangeof Investment Options allows you to choose what sort of investment portfolio you will have. They are explained in the Investment Options booklet which we have sent you. That booklet is part of this PDS. Further information can also be found in the App. Take the time to explore the options that interest you. As Investment Options change, the App will let you know, and you can read about them on the App or in the updated Investment Options booklet.

Will I earn dividends?

FirstStep receives dividends from the ETPs it invests in. These dividends are reinvested in your portfolio on your behalf.

Can I change my exposure to asset classes?

You can change your exposure by changing your core investment option.

Is there risk involved in my investment?

Making you money work better involves some risks. Risk is a part of investing. Risk happens. Risks can mean that you lose money as investments can go down in value. The risks associated with investing through FirstStep range from low to high – it depends on the particular mix of Investment Options which make up your FirstStep account. Changes in value can be big and can happen quickly. As a general rule, the higher the potential returns, the higher the level of risk. Neither returns nor the money you invest in FirstStep is guaranteed. The significant risks associated with FirstStep include those set out below. They are detailed more in our Additional Information booklet. It's available free from the App.

Security

Is my investment secure?

Australian Executor Trustees, a professional custodian, independent from FirstStep holds your investments. A ET Executor Trustees Limited (AET) is one of Australia's largest and oldest licensed trustee companies. AET has been providing custody and trustee services for over 130 years, having been established in 1880. AET is a member of the IOOF Holdings Limited ("IOOF") Group, a leading provider of wealth management products and services in Australia. IOOF is an ASX100 listed company.

Why does FirstStep need my bank login information?

By providing your bank login details, it allows FirstStep Investments to categorise your spending so you can monitor your spending habits and find investment opportunities. This information is encrypted and is not readable or viewable by FirstStep - it's simply used to import your spending activity.

How do you protect and store my bank login information?

All our data is stored using AES-256 encryption and 2048-bit SSL Security. Security is a major priority for us, that is why we have spent a lot of our capital on penetration testing, facilitated by an overseas third party who specialises in testing military grade security measures.

Can firststep employees view my bank details?

When you use FirstStep, your bank details are encrypted and are not visible or readable by anyone, not even by us.

When I make a withdrawal is there extra security?

Yes, every time you want to make a withdrawal we will send you an email with a link to verify your withdrawal instruction.

What happens if one of my linked cards is stolen or lost?

Your account with FirstStep will not be compromised. You will need to unlink your stolen or lost card from your FirstStep account. You can do this in the App.

How do I protect my firststep account?

We automatically log you out if you close or switch to other apps. We encourage you to set up a secret pin-code or enable touch ID for applicable iOS devices.

Why might FirstStep ask to see my driver's license or passport?

This is so we can comply with AUSTRAC Anti-money laundering and counter-terrorism financing laws in Australia, also called AML CTF and KYC (Know your customer) laws that require us to verify the identify of anyone investing funds with FirstStep.

Why does FirstStep need my Tax File Number (TFN)?

This is so we can issue you an end of financial year tax form. You do not have to disclose your TFN but most FirstSteppers do. If you don't have a TFN yet, you can ask the tax office for one online. We suggest you do this before you sign up. If you choose not to tell us your TFN and you do not have an exemption, we must deduct tax at the highest personal rate, plus the Medicare levy, before paying any distribution to you.

Will FirstStep lock my account due to suspicious activity?

Yes, we will. If this happens, please contact the FirstStep Team ([email protected]) to unlock your account.

Account Management

What happens if I delete the app?

Even if you delete the app, your FirstStep account and investments continue to be maintained. You can re-download the app and log into your account.

How can I close my FirstStep account?

We would hate to see you go, but you can close your FirstStep account anytime! How? Just use the “Close my account” option in the App. FirstStep Investments will stop checking your bank account for money which can be invested, we will sell investments as we need to and you will be paid your FirstStep account balance less anything else you have to pay. We are usually done in a few days and FirstStep Investments will usually have the money in your bank account a day or two later. If you close your account in the first three months we usually deduct a $3 processing fee.

Can I withdraw money whenever I want to?

Use the App to tell us how much you would like to withdraw. FirstStep Investments can usually only place an order to sell investments on Sydney business days when the ASX is open. It usually then takes a couple of Sydney business days to get our hands on the cash. Unusually it can take longer.

How do I view the performance of portfolio?

Use the App to find your latest account balance.

How do I stop my virtual change from been invested?

At any time, you can choose to pause your virtual change contributions, from all or any selected accounts.

Taxes and Fees

Do I have to pay taxes on money I make through my FirstStep account?

What follows is a general guide only. Tax can be complex. Find an accountant you trust and speak to them before making investment decisions. At each 30 June - Investments often earn income, and each year after 30 June we credit this to your FirstStep account and (rather than paying it to your linked account) reinvest it to keep it working for you. You can withdraw any time. FirstSteppers will usually incur an income tax liability on their distributions, whether reinvested or not. Withdrawals - In normal circumstances you can access your invested money pretty promptly. You will usually incur a capital gains tax liability when you make a withdrawal (including switching between Investment Options and portfolio rebalancing) and when you change your account name to someone else

What are your fees?

If you elect to link your online bank account, you will pay 0.275% on your investment balance subject to a minimum of $1.25 per month. For more information, visit section 6 of our Product Disclosure Statement. Section 6 ("Fees and costs") of the PDS shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the assets of the managed investment scheme as a whole.

Do I incur ETF management fees?

There is a cost associated with investing in exchange traded products (or ETPs). FirstStep Investments estimates these as between 0.15% per year and 0.30% of your FirstStep account balance per year. The actual cost may be more or less than this. To give you a feel for this, if you had a FirstStep account balance of $500, then this would be between $0.75 and $1.50 each year.

Tips and guidance

Why should I invest?

It’s a great way to to make your money work for you, instead of you working for money. The sooner you start investing, the greater you can benefit from compounding return over your lifetime. Keeping your money out of the market can mean losing thousands of dollars of growth and dividends over the course of your life.

What is an ETF?

An ETF (exchange traded fund) is a basket of shares or bonds that are traded on the ASX (Australian Stock Exchange). An ETF tracks an index which is a group of shares or bonds with something in common. For example, the Australian Shares Index tracks the returns of the S&P/ASX 300 Index. The S&P/ASX 300 Index contains the top ASX 200 companies and 100 smaller companies. When you buy the Australian Shares Index ETF, you are getting broad exposure to the top 300 companies listed on the ASX.

What are Shares?

Investing in Shares is like owning parts of a company. Your FirstStep portfolio includes ETFs that holds hundreds of individual shares. If a company performs, their share price may go up, leading to better potential returns for you.

What are Bonds (or Fixed Income)?

Bonds are a debt investment where an investor loans money to a business or government and gets paid back with interest. Bonds are generally less risky than shares and help diversify your portfolio.

What’s a Portfolio?

A portfolio is a group of assets (like shares and bonds). Your FirstStep portfolio is a diversified mix of ETFs. We believe the right foundation for a risk-adjusted portfolio is to invest in ETFs, constructed by well-known investment management companies, that often replicate an index like the S&P/ASX 300 Index or the MSCI World Index.

What is Return?

Return is a measure of your portfolios performance. If you invested $100 and your return is 6%, this means you have gained $6 on your investment. Returns move up and down in line with the price of each ETF in your portfolio.

What is Compounding?

Compounding is the cumulative effect of your Returns over a period of time. If you invested $100 and your annual return was 6% each year for the last 5 years, then your gain on investment is $33.83 ($100 x (1+6%)^5). The effect of compounding can greatly increase the longer you invest

What is Risk?

With investing, Risk is the chance that an investment's actual return will be different than expected. It means you have the possibility of losing some of your original investment. Generally, low levels of risk are associated with low potential returns.

What is Volatility?

Volatility is the statistical measure of Risk. If volatility is 10%, markets think your portfolio will change by 10% for the next year (up or down).

What is a Dividend?

A dividend is a distribution of a company's earnings (a certain amount of profit). Your share of a dividend is sent to your FirstStep portfolio and re-invested each year.

I’m losing money in one of my investments. Should I sell and invest in something else?

Investing can be really daunting at first but it’s a long term play. Sometimes your FirstStep Account will fall in value which may tempt you to sell. It’s your money so you can withdraw your investments at anytime but we recommend holding investments for the long-term and learning through experience concepts like dollar-cost averaging and volatility.

If I invest in themes will I earn a greater return?

Themes are a great way to invest towards companies that are aligned to your interests. Some themes do perform better than others. While some themes may get a better return than others, your FirstStep account will always adjust your portfolio to the right balance of risk.

How is investing different to putting money in a savings account?

Savings accounts are great ways to put your money away in a safe place for future needs. Most savings accounts pay very low interest rates, which means your money in a savings account isn’t growing much. It might grow a little, but savings accounts are a way to keep your money safe, not a way to make your money grow.

Legal

Company

Where to find us

FirstStep is licensed to operate in Australia and only Australian citizens and residents can purchase or sell securities through its application. FirstStep is owned and operated by FirstStep Investments Australia Pty Ltd (ACN 612 834 947) - Authorised Representative of Primestock Securities Ltd, AFSL 239180. Equity Trustees Limited (“Equity Trustees”) (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the FirstStep Fund. Equity Trustees is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT).

This website has been prepared by FirstStep Investments Australia Pty Ltd, to provide you with general information only. In preparing this website, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither FirstStep Investments Australia Pty Ltd, Equity Trustees nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product.